Going to work in the morning is related with happiness or at least a state of acceptance next to your job. You work 8 to 10 hours a day, you get paid, and then you get back to your life.

In the same time, job satisfaction is a necessary evil. Your existence is conditioned by the needs that you have and also the needs of those for which you are a provider. No matter how much we get, we want more. Is what drives us forward, being in the same time the root of our unhappiness.

No matter how much the organization does, in the end job satisfaction is a choice, an acceptance of your responsibilities with a reward that influences not if you go to work, but if you go to work at the same company next month.

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A manager is required to evaluate the performance of his/her subordinates, usually on a yearly basis. Their recommendation is the basis for an extra payment – the merit pay.

Merit pay plans allow to differentiate the high performers from the rest and to reward for a non repetitive task. Most researchers agree that they are not really working.  The main issue could be that the employee’ performance is judged in a subjective manner by the manager.

The lack of effectiveness comes from:

• Low discrimination distance. When there is no accurate measuring system in place, a manager will have the tendency to equalize the merit pay. This will make high performers unhappy, and low performers confused.
• Merit pay is too small. Because the merit pay is calculated as percentage from the salary, it will go unnoticed, and the level of satisfaction will not act as a motivator.
• Pay level is secret. Merit pay is too. Most of the companies in this world impose a policy of secrecy over wages, benefits and bonuses. I am sure that there arguments in favor of this. But, companies are made of people. When people do not know something they assume or invent. You can be sure that everybody will think that the other is paid better! Job satisfaction and motivation will decrease exponentially. If merit pay is kept secret, none of the employees will know who performs better and how much is performance paid with.

The methods of evaluating performance are evolving all the time. I think that, by now, there are enough objective criteria even to evaluate “the impossible to evaluate in numbers” white-collar employees’ performance. Merit pay could work only if managers give up their royal right of granting rewards and punishment based only on their subjective reasoning.

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Individual performance is important, but a company is not formed from one individual. A company is a team and its strategic needs can be supported by group-oriented pay plans.

Profit sharing is one of the most used incentive systems. Money-wise it might not make a difference in a big company because the impact on profit from one individual is small. But in a small company it matters and in time, when most small companies will become partnerships, and the notion of employee will be history, this will represents the only form of compensation.

Employee Stock Ownership Plans (ESOPs) and Employee Stock Purchase Plans (ESPPs)
An ESOP allows employees to own stock in the company without having to purchase shares. An ESPP allows employees to use after-tax wages to purchase stock in their companies, usually at a discounted price.
Implementation of such incentive plans is not easy. There are taxes implications, private companies are required by law to purchase ESOP share from the employee that leaves the company, and so on.
But as motivational factor, ownership remains in the top of the list. For start-ups, especially in this period of economical crisis, it can also be used as partial replacement for money that constitutes the salary.

Gainsharing incentive schemes have usually as goals: improved productivity, quality performance, customer service, cost reductions, etc. It differs from profit sharing by the fact that is not related to the company’s performance.
The employees participate in the decision-making process and the gains obtained when reaching the goals are shared between the company and the employees. Gainsharing requires a team oriented management style and can lead improvements in performance as well as increased commitment to organizational goals.
Some of the most known schemes are: the Scanlon Plan, the Rucker plan, and Improshare.

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The concern for motivation in the work environment has change the purpose of job design. Job satisfaction, performance, customer satisfaction, and quality of working life are the goals that must be accomplished through job design and the associated techniques: job enlargement, job enrichment, job rotation.

Job scope is defined as a combination of the number of different activities performed by an employee and the level of control that an employee has upon how to perform those activities.

A manager has a high scope job because he performs a large number of activities (see Management – art of controlling processes and outcomes) and has a broader or narrower decision-making power.

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You make an effort and expect a performance. If performance is achieved you have the expectancy of a reward that will satisfy a need. All this process will take place only if you decide that satisfying your need worth all the effort.

Victor Vroom – Expectancy Theory is based upon the following three beliefs:

• Valence (from latin valent-, valens – to be strong) – refers to the strength that an individual has to prefer a particular outcome. In short: What’s in it for me?
• Expectancy – is what you think you can do and what the result will be.
• Instrumentality – is your carrot & stick process. Your perception that the work you do will get you paid.

We have also a little formula for this: Expectancy x Instrumentality x Valence = Motivation. This formula can be used to analyze things like: job satisfaction, choices of occupation, stability on the same job, effort that an employee will put in at work.

What a manager can do according to Expectancy Theory is to clarify the path of the employee by providing proper tools and training, an easy to understand performance evaluation system and mostly by listening to his problems.

If every individual has preferences for defining outcomes (higher pay, promotion, etc) it will be only common sense for a manager to define a motivational package accordingly.

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The performance is created by adding a wage incentive plan. For an incentive plan to work, the employee must want more money and perceive some effects:

• Good performance leads to more pay and does not have negative consequences
• Their effort leads to improved performance
• See the other colleagues getting desired rewards based on the results of their good performance

The manager will have issues related to the wage incentive plan:

• Low quality – even if you have in place a system that monitors quality, the employee will find ways to increase productivity on the expense of quality.
• The access to resources – if a group of employees has access to resources at the expense of other groups, it will be perceived as an unfair advantage, decrease motivation and affect the work environment.
• Diminished cooperation – the tasks that are not related directly to production will be neglected
• Incompatibility – if a team is to large or an assembly line to complex is difficult to define the individual contribution
• Productivity restriction – the employees will have an interest in define a limited work output for a workday, in the interest of transferring a part of the real work output under the incentive plan

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In organizational behavior, the punctuated equilibrium model (Gersick, 1191) consists of analyzing the evolution in a team based on the timeline and evaluating the performance based on the level of involvement the team members have.

• Phase I – The members of the team act according to the specific schedule: meetings, working on tasks, etc. Although it takes almost half of the entire existence period of team, the progress is barely visible.
• Transition point – A sudden consolidation process starts. People manifest their commitment, become perceptive to outside influences that can influence the progress of project.
• Phase II – Action time! Things happen. Work is done and the way people work is fundamentally different from before.

In project management is useful to take in consideration this model. Because the communicator’s job is to feel that transition point! The problems do not solve themselves.

You need to obtain the acceptance from your team members about the need of change in the way things are done. You need them to focus on the same ideas and on to worry about how they will be looked upon from outside.

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There will always be a tendency to behave egalitarian in an effort to make people feel good. The level of hypocrisy involved makes it useless.

People feel the lie. If they are your employees they will despise you. If they are you superiors, you will get rejected. Your job is most times just a job. Define correctly your place, treat the other with respect and understand their place. Real value is real value. Even if people do not like you as a person, they will still respect you if you are true to yourself.

A team will evaluate its members based on two constructions: formal authority and informal status (respect).

The formal status is the etiquette used to make sense of the organization’s behavior. The value is given by the organization and is accepted by others based on the acceptance of their own status. An employee will listen to the manager that has a higher status because he perceives the higher value given by the company. Also his needs of moving up the company’s food chain is nourished by the existence of a superior position (hence motivation).

The informal status is a form of respect. It is given by the other team members only to those that are worthy and is mostly related to job performance.

Characterizations based on difference of gender are not a status. You will be surprised how easy a mentor can loose the attention of its followers only because she is a woman. The male employees have a beer-talk with the male boss who expressed his disappointed with woman getting pregnant and not performing. The little suck-ups node their empty heads in approval and behave accordingly.

Any employee has a tendency to communicate with peers or superiors. If the distance between the emitter and the receiver is perceived as too large, the communication process doesn’t happen.

A status barrier can be lifted in two ways:

• Create a grapevine communication system. The organization can be characterized as informal and this can be a disadvantage because it will affect the processes already in place.
• Define procedures for dealing with level of importance for issues and address them directly to the person that has the formal authority to say yes or no. That manager might not be your direct superior and you will have to take responsibility for the judgment call you make.

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1. Task Identity – related to the fact that a piece of work can be identified as having a beginning and an end or not.
2. Autonomy – refers to the level of freedom the employee has over deciding his schedule and work procedures
3. Skills Variety – the number of different activities performed by an employee
4. Task Significance – the perceived impact of work on the final product, other employees or the work environment
5. Job Feedback – information provided to the employee regarding his performance
6. Self-expression – a measure of the match between an employee and the task assigned to him/her

Job Diagnostic Survey (JDS) is a questionnaire that uses the following formula to calculate the motivational potential of a job:

Motivating Potential Score = (Skill Variety + Task Identity + Task Significance)/3 x Autonomy x Job feedback

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Even if you would like your job to be something repetitive, with fixed hours and just breaking the door when the bell rings, you will still love a challenge. Why? It is called need of social recognition. We all have it.

The same need and the value we give to ourselves in a social context are reasons for which a promotion makes us happy.

Why the people around you are important? Maybe because you spend with them every day more time than you spend with your family?

When your job makes you happy there are a series of benefits for the organization:

• Absence from work – I am not talking about physical absence. If your mind is not there it does not matter if your body is.
• Turnover – replacement of employees is so expensive, that only morons do not care if their employees are happy.
• Performance & Organizational citizenship behavior – happy people walk the extra mile.
• Customer satisfaction – who does not love a smiley face?

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